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Domain chief executive Antony Catalano rang the bell at the ASX in Sydney at midday to mark the start of trade in the stock, which opened at $3.80, above analysts' forecast valuations.

With 575 million Domain shares on issue, the property listings and real estate services business has a market capitalisation of almost $2.23 billion, based on an average $3.86 share price over its first few hours of trading.

At 1515 AEDT Domain shares were at $3.78, having hit an intra-day high of $3.98.

Parent company Fairfax Media took an expected fall as its highest-value asset was spun out, with Fairfax shares down 31 per cent to 73.5 cents.

Under the separation plan, Fairfax holds onto 60 per cent of Domain while shareholders will hold the remaining 40 per cent--receiving one share in a newly listed Domain for every 10 Fairfax shares owned.

Shareholders will keep their existing Fairfax shares.

After beginning coverage of Domain on Wednesday, Morningstar senior analyst Brian Han put a fair value estimate on Domain of $2.90 per share.

"This implies an equity value of $1.7 billion," Mr Han said.

Mr Han said this represents about a quarter of Morningstar's valuation of its rival, News Corp's ASX-listed property advertiser REA Group (ASX: REA), which generates over four times the earnings before tax of Domain.

Mr Han said Domain's outlook should benefit from national population growth of between 1 and 2 per cent, as well as strong revenue growth per listing, as Domain websites win a larger proportion of property selling business.

Fairfax has been crystallising its spinoff plans since US private equity firms TPG and Hellman & Friedman dropped out of bidding for the publishing group in July.

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